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The Nuclear Decommissioning Authority (the Authority) was established in April 2005 under the Energy Act 2004 to take forward the decommissioning of UK's civil public sector nuclear sites. The Authority, a non-departmental public body, is sponsored by the Department for Business, Enterprise and Regulatory Reform (the Department), which approves its strategy and plans. Scottish Ministers approve its strategy and plans for Scottish sites. By December 2007, 14 of its 19 sites had already shut down and were being decommissioned and parts of Sellafield, the UK's largest site, were being cleaned-up.
The Authority discharges its responsibilities through contracts with licensed operators at each site. Site licensees manage sites, including preparing decommissioning plans and performing and sub-contracting work. In turn, licensees are owned by one of four parent bodies. The Authority is aiming to improve sites' performance by putting the right to be the parent body out to competition. The competition to be the parent body for Sellafield is due to be concluded by the end of 2008.
The Authority has established decommissioning plans for clearing individual sites but there is considerable uncertainty over the costs of decommissioning. The latest plans—prepared in 2007—estimate that it will cost £73 billion to run those sites still operating and decommission the Authority's sites over the next 100 years. This is an increase of 30% since 2003, and there is a risk that costs may rise further. The Authority is dealing with a legacy of deferred decision making going back over 50 years of the UK's nuclear power programme. Some uncertainty in the cost estimates is, therefore, inevitable, but some of the escalating cost estimates should have been avoidable, including extra costs imposed by short-term changes to the decommissioning programme and the scale of site support costs.
The Authority's work has been hampered by uncertainty in the level of commercial income earned from ageing and unreliable facilities, and by emerging priorities at Sellafield. As a consequence, the Authority has had to cut, at short notice, the levels of funding it was planning to provide most of its decommissioning sites in 2007-08. This stop/start process in decommissioning has imposed additional costs on the taxpayer, with the Authority providing £31.6 million to cover the costs of early contract closure and staff training and redundancy. All these factors combine to disrupt the Authority's plans.
In January 2008, the Government announced it would allow energy companies the option of investing in new nuclear power stations. Operators will be expected to meet the full cost of decommissioning new facilities and their full share of waste management costs.
On the basis of a Report by the Comptroller and Auditor General, we examined the Authority and the Department for Business, Enterprise and Regulatory Reform on estimating the costs of decommissioning and delivering the decommissioning programme.[1]
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